The Most People Working for Other People Ever

Rhode Island Twitter has been going ’round and ’round trying to understand how it is that Democrat Governor Gina Raimondo claims that Rhode Island now has more jobs than ever before while others point out that the state has fewer people working.

The basic point at issue, here, is that the federal Bureau of Labor Statistics (BLS) releases two sets of employment data. One set, from which we get our unemployment rate, is based on a Census survey that estimates the number of Rhode Islanders who would characterize themselves as “employed.” That includes business owners, people who freelance or work for themselves, and people who work in other states (or telecommute to jobs in other states).

The other set of data is based on official tax filings from companies located in the state. In this case, a job counts as somebody working for a company as a bona fide employee within the Ocean State, excluding the owner. So, people who are self employed don’t count, and people who live in other states but work for Rhode Island companies would.

For a while, Governor Raimondo’s PR crew was taking government jobs out of the mix in order to proclaim the highest private sector job count in history. Now, the achingly slow growth in the number of jobs in the state (which has slowed even more under the current governor) has finally notched its way past its pre-recession peak of 495,700, to 497,700 in January. Nationwide, this picture looks like this:

Yes, Rhode Island is over the 100% recovery line, but it is in the bottom 10, and it’s about 4% lower than the national average recovery at this point. The same chart for employment looks even worse, with Rhode Island about 7% below the national average.

Obviously, a complete picture of the state’s economy requires review of both sets of data… and more. The Rhode Island Center for Freedom and Prosperity’s Jobs & Opportunity Index (JOI), for example, considers 12 different sets of data having to do with work, prosperity, and freedom from government dependence. (Rhode Island currently ranks 47th by those measures.)

As for employment versus jobs, choosing one over the other will mainly be a matter of preference. The employment data is less precise, being based on a phone survey, but relatively higher employment should mean more dynamism and independence. Relatively higher jobs might be preferable for those who prefer centralized control of the economy and society.

“Relatively higher jobs might be preferable for those who prefer centralized control of the economy and society.”???? Positive employment news now means you are pro-“central-planning”? I think these positive employment numbers has cause a meltdown of some sort.

Justin Katz

Not at all. Higher numbers are good in either case. But higher jobs numbers relative versus employment numbers would be more attractive to those who like a centrally planned economy.